Sign up to get our free landlord tax strategies

To receive our seven FREE landlord tax saving strategies just simply complete the form below and the first strategy will be emailed to you immediately.

Sign up to get our free landlord tax strategies

Thank You!

Seven FREE property tax busting strategies reveal the secrets of how to legitimately beat the taxman and boost your property profits!
View All Questions

Can I Claim VAT on Purchased Property?

If I buy a property as a new company and carry out building work (new and repair), can I claim back the VAT spent.  Can I also then pay myself with dividends?

Arthur Weller Replies

Generally, if the property is a residential property then a landlord is making exempt supplies and whether he is an individual or a company, he cannot reclaim back the VAT spent on new building works and repairs on an existing property. However, VAT is charged at the reduced rate of 5% on the supply of services and building materials for the conversion of non-residential property into dwellings, conversion of residential property into a different number of dwellings, conversion of residential or non-residential property into a multiple occupancy dwelling and the bringing into use of a property that has been empty for three years and some other circumstances.

You can always pay yourself dividends from your company, provided the company has enough distributable profits in the profit and loss account to do so. 

See pages CTM20090/5 on the HMRC manuals:

Property Tax Insider This sample question and answer is taken from Property Tax Insider, a monthly UK tax saving magazine for landlords and property investors.

The first issue is free so click here to try today!

Got a burning tax question?

Why not submit a tax question to our tax advisors

Ask a Question